The recent study on the Australian economy has revealed a number of issues which require a lot of attention. Some of the issues that rose after the study include the declining balance of payment and reduction of the total revenue generated by the government. There is therefore a need for government intervention in Australian economy that will greatly help in removing these imbalances.
If this trend is left unresolved, the economy might greatly suffer in terms of reduced economic growth and loss of jobs for the citizens. For instance, on the reducing balance of payment, the government would be forced to continue relying on other countries and as a result causing the situation to become worse. Under such situations the inflows from the country would exceed the foreign inflows generated into the country. In regard to the total revenue collected, governments has greatly lost a major source of revenue mostly because of closure of large production firms that previously generated lot of revenue for the government.
Most of these firms were closed down as a result of failure to obtain the production materials. By intervention, the Australian government can greatly solve this problem and thus help the economy to recover from recession. Increasing the revenue can be done by use of incentives. When raw materials are subsidized, the produces usually realize a reduction on the cost of production.
This in turn translates to reduced market prices and increases on the demand of the product. This therefore causes the producers to increase their sales. Consequently, the government gains by way of taxes which are then used to finance major development projects in the country.
